Is Now An Opportune Moment To Examine Mesa Laboratories, Inc. (NASDAQ:MLAB)?

While Mesa Laboratories, Inc. (NASDAQ:MLAB) might not have the largest market cap around , it received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Mesa Laboratories’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Mesa Laboratories

Is Mesa Laboratories Still Cheap?

Great news for investors – Mesa Laboratories is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $188.11, but it is currently trading at US$113 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Mesa Laboratories’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Mesa Laboratories?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for Mesa Laboratories. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since MLAB is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on MLAB for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MLAB. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

So while earnings quality is important, it's equally important to consider the risks facing Mesa Laboratories at this point in time. Every company has risks, and we've spotted 2 warning signs for Mesa Laboratories (of which 1 doesn't sit too well with us!) you should know about.

If you are no longer interested in Mesa Laboratories, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.